Financial emergencies seem to be the norm these days. We’ve been going from one financial crisis to another for the past 10 years. When you have bad credit and need a quick insurance, a two-day wait is usually acceptable but a insurance rejection is not.
Fortunately, the internet has given us all the ability to get money into our bank accounts within a few hours of applying. You just have to meet the terms and requirements set by the lenders. It also goes without saying that the cost of immediate approval is higher than if you could wait a day or two for approval.
The reason why an online lender can give you instant money is because they do not perform any credit checks on you. This means that they have to use other means to ensure that you risk defaulting on the insurance and that you are able to make monthly payments.
What does instant approval mean?
Immediate approval does not mean that there is no approval process. Thinking that anyone who doesn’t know you personally will only give you money without doing any form of verification is crazy. However, the immediate approval seemed to indicate that the mind is exaggerated.
The approval process used by online lenders is very simplified since there is no credit check. The credit check takes several hours and this is one of the things that slows down traditional lenders in the approval process.
Online insurance applications use computer software to check insurance approval criteria. The software can quickly calculate the debt-to-income ratio and determine if a insurance is affordable for you. The software can then send the email and start transferring money to your account.
Instant insurances are not ideal
With all the good news surrounding instant insurance approval, there is some bad news. Essentially, bad credit increases the cost of the insurance over time.
Expect to pay an additional 1 percent interest on your insurance by going to an online lender with instant approval. They will also have lower maximum insurance amounts, some of which may only be $10,000.
What about payday insurances?
It is impossible to turn on the radio or television today without seeing an advertisement for payday insurances. Payday insurances have become a popular insurance option for many people. It is almost impossible to be refused a payday insurance as long as you have sufficient income.
The premise behind payday insurances is that you borrow money upfront from your next paycheck. The original payday insurances will take the full repayment from your bank account on the next payday day. This made the insurances risk free for the lender.
Originally, payday insurances were limited to amounts ranging from $100 to $1,500. They will charge 30% interest. Today, payday lenders will lend much larger amounts at higher interest rates. If you can’t pay off the insurance quickly, payday insurances are very poor financial options.
Payday insurances can be useful if you can pay them off within a month and use the money to pay off other debts. This will increase your credit rating and will allow you to get better personal insurances to consolidate your existing debts.
Always do your due diligence when looking for an immediate insurance. There are scams on the Internet and they want to get your personal information. Call the customer service number and make sure the company answers. Make sure they don’t just include a PO Box for the company address. Protect yourself from identity theft also when you are in a financial crisis.